Equality, Participation, Transition: Essays in Honour of Branko Horvat

Jozae Mencinger 119
Since 1945, four distinct types of economic system in Yugoslavia can be
distinguished:
1 administrative socialism, or a Soviet-type economic system (1945–52);
2 administrative market socialism (1953–62); which gradually led to:
3 market socialism (1963–73); and
4 contractual socialism (1974–88), followed by the collapse of socialism
and the breakdown of the country.
The starting years of each period coincide with newly passed constitutions.
Such periodization can be subject to criticism. First, it creates the
notion that abrupt changes occurred in those years when actually they
did not. Secondly, some far reaching institutional changes preceded constitutional
changes; some followed them in subsequent years. Thirdly,
the gaps between the ideology, embodied in constitutions, which really
set out norms of behaviour, and the reality were always wide. Fourthly,
some economic policy changes had a much greater impact on actual
economic development than systemic changes. The 1965 economic
reform, which was dominated by macroeconomic policy change (Bajt,
1984; Burkett, 1983), has even been considered the turning point
between the more successful and the less successful period of labour
management (Horvat, 1971; Sapir, 1980). The same is true with respect
to the 1980s, when the change in economic policy forced by the country’s
indebtedness caused a similar turning point in all measurable performance
indicators. The periodization is, however, closely related to
changes in the formal allocation of decision-making in the economy.
What were the reasons for these systemic changes? If we reject the
view that the changes reflected the rather mystical concept of the
‘increasing development of productive forces’, the answer must be that
the predominant reasons were either economic or political. Later in the
paper, I shall argue that political factors were dominant in the abandonment
of the Soviet-type, centrally planned system in the early 1950s, and in
the adoption of the associated labour concept in the early 1970s, while the
reforms in the early and mid-1960s were prompted predominantly by economic
considerations. Economic collapse in the early 1980s can be
considered the reason for the reform attempts in the late 1980s.
The rest of the paper is divided into five sections. The main features of
the economic systems before the 1970s are summarized in Section 8.2.
An attempt is made to identify the reasons for their reform. Section 8.3
describes and comments on systemic settings contemplated in the
course of the 1970s. The normative setting of the so-called ‘contractual